What: Shares of Cliffs Natural Resources are up 10.8% as of 3:15 p.m. EDT today after iron ore competitor Essar Steel filed for Chapter 11 bankruptcy protection for its Minnesota iron ore mine and Cliffs mentioned in a press release that it would be interested in acquiring the mine. It's also helping that Chinese demand for iron ore is on the rise.

So what:Cliffs Natural's last acquisition was the $5 billion Consolidated Thompson disaster back in 2011. Since then, the company has been slowly unwinding those positions through divestments or writedowns. One of the reasons for the failure -- aside from the sky-high price at the absolute peak of the commodities market -- is that it didn't support Cliffs' core assets: its highly profitable iron ore mines in Minnesota and the Upper Peninsula of Michigan.

Besides the news that Essar is filing for bankruptcy after Minnesota revoked its operating license for not completing the mine, it was also announced that Cliffs Natural CEO Lourenco Goncalves is interested in taking over the mine if the state grants the mining license. This comes after the company had signed a major supply contract recently that led to its restarting operations at one of its Upper Midwestern U.S. mines. Getting this mine up and running would be a way for it to grow its production where it knows how to operate effectively -- something it wasn't ready to do with its Consolidated Thompson buy.

The other piece of news lifting Cliffs' stock is Chinese iron ore's more robust demand in recent months. Last month, export volumes at Australia's Port Hedland hit record levels. This is important to Cliffs because its Australian mining complex has been a thorn in the company's side for a couple of years now as sales margins have been razor-thin. Margins are improving a bit, and an increase in demand could help to bring prices up even further.

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Now what: There have been a lot of good signs from Cliffs lately. It has upped sales guidance and shed its most unprofitable assets that were dragging the rest of the company with it. The new anti-dumping tariffs on steel from several other imports should also help to give the domestic steel market the boost it's desperately needed over the last few years. Compared to the multiyear slide at Cliffs, things are certainly starting to look up again.

To be clear, though, the company isn't out of the woods yet. An onerous debt load remains from the Consolidate Thompson blunder, and it will need to clean up the balance sheet to make it a better-prepared company when the industry cycle turns south once more. It has done enough that investors probably don't need to run for the hills, but there are still a few more steps before it's truly a buy again.